Missouri Foreclosure Laws

In Missouri, the average foreclosure takes sixty days. Both statutory judicial and non-judicial foreclosure processes are allowed in the state, although out-of-court (non-judicial) foreclosures are more typical.

Judicial and Non-Judicial Foreclosure in Missouri

Statutory judicial foreclosure allows a lender to initiate foreclosure in the county circuit court where the property is situated. This form of foreclosure process allows the lender to start actions against the debtor, junior lien holders, judgment creditors, individuals having right of possession, and anyone who has claimed interest in the property or has assumed the original debtor's indebtedness. This foreclosure proceeding is used in cases where a mortgage or deed of trust makes no power of sale provisions for the lender. This foreclosure proceeding is also used when complications arise that cannot be resolved through a non-judicial foreclosure.

Most foreclosures in Missouri are non-judicial, because most deeds of trust and mortgages have a power of sale clause that allows the lender to eschew the court system when seeking foreclosure.

The Foreclosure Sale in Missouri

In non-judicial foreclosures, the lender must send the borrower a Notice of Default. Once this notice has been sent, the lender can set the foreclosure sale. Before the sale can take place, however, the lender must mail and publish the notice of sale. This notice must include information about the deed of trust, the grantor on the deed of trust, a description of the property, and the time and place of the auction. The notice must be published in a local newspaper once per week for four weeks and the last publication of the notice must take place at least one week before the day of the auction.

If the property overlaps county lines, the notice of sale must appear in a local newspaper in each county. If the property is situated in one of Missouri's first-class Counties, the notice of sale must be published in a local newspaper for 21 successive days. The last day of publication in this case is the day of the foreclosure auction.

In addition to publication, the notice of sale must be mailed by registered or certified mail at least twenty days before the auction day to the original grantors named in the Deed of Trust, the property owners, and any person who has requested a notice of sale. In all cases, the notice of sale is sent to the last known address of all these parties. In addition, if an IRS Notice of Lien is filed on the property more than a month before the auction date, the notice of sale must be sent to the IRS as well.

Missouri's foreclosure laws make a number of provisions for extenuating circumstances. For example, if the property owner dies before the foreclosure sale, the auction is postponed for six months. If the debtor files bankruptcy, the foreclosure sale is halted until the Bankruptcy Courts can reach a decision on the matter. If the sale needs to be postponed for seven days or less, the sale can continue on without renewing, resending, and reposting the sale of notice. However, the new time and place of the sale must be announced at the time and place where the original sale was to have taken place.

After the Foreclosure Sale

The auction takes place between 9:00 a.m. and 5:00 p.m. and is usually conducted by the trustee. The trustee begins the auction by noting the terms of the sale. In many cases, the winning bidders must submit 10% of the sale price at the auction and pay the rest of the bid price to the trustee's office by the end of the same business day. Once the terms of the sale are announced, the trustee reads the notice of sale. Then, bids are taken until no more bids are made. The highest bidder is considered the winning bidder. After the sale, the winning bidder is granted a deed to the property.

Missouri foreclosure laws allow for common-law, equitable redemption as well as equitable redemption. There are two ways to redeem a property under statutory redemption. The borrower can redeem the property at any point up to the time of the foreclosure auction by paying the debt balance as well as the costs the foreclosure has incurred. Secondly, the debtor can redeem the property if the purchaser at the foreclosure auction is the mortgagor, or the heir, executor, devisee, administrator, or grantee of the mortgagor. In this case, the mortgagor must pay the amount of the debt as well as associated costs within one year of the sale. He or she must also provide written notice of his intentions up to ten days before the auction or at the auction itself. He or she must also post a Motion of Appeal and a bond with the clerk's office within twenty days of the auction.

Equitable, common-law redemption allows the borrower to appeal to the court if some mistake or flaw has occurred in the sale or if fraud has taken place that would cause the borrower damage. For example, if a mistake has resulted in the property being sold for a lower price than it would normally sell for, the borrower may have a case. If the court rules in favor of the debtor, a redemption period of one year is allowed.

The IRS retains the right to redeem the property within 120 days from the day of the auction sale. The IRS can redeem the property by paying the bid amount as well as interest that has accrued from the day of the auction.